Shangrong Healthcare's failed expansion lost its share price by 83.1 billion yuan, shrinking by 1.8 billion yuan

The dream of medical device listed company Shangrong medical expansion is difficult to circle.
, which went public in 2011, is far from expectations, despite steady growth in operating results. In the first half of this year, the company achieved a net profit of 0.96 billion yuan, a slight increase of 0.74 percent year-on-year.
Changjiang Business Daily found that after the listing, Shangrong Medical had ambitious expansion plans. Since 2013, the company has acquired a number of medical device companies such as Purder Medical, Jinzhou Medical Equipment and so on. At present, the effect has not been achieved, the most expensive acquisition target Jinzhou medical performance did not meet expectations.
expansion is not smooth, Shangrong Medical tried to take the endoentic expansion road. From 2015 to this year, the company has raised funds three times for medical supplies projects and the overall construction of hospitals. Unfortunately, the total amount of 3.13 billion yuan raised was only 1.318 billion yuan, a decline of nearly 60%.
fund-raising directly led to the company's industrial expansion plans blocked, so far in 2015, the company's planned hospital surgery department, ICU product industrialization project investment is far from the expected.
the secondary market, investors' approval of Shangrong Medical is not high. In the more than three years since June 2015, the company's share price has fallen by more than 80%.
note is that in July this year, the company's finance director swimming to implement a reduction in holdings. It was its third sell-off since 2016.60% of the $3.13 billion
, Shangrong Medical has been extremely difficult on the road to refinancing.
September 27 this year, Shangrong Medical issued an exciting announcement, the company plans nearly half a year of public offering of convertible corporate bonds project was approved by the CSRC. This means that once a written approval document issued by the SFC is received, the company can implement it.
, however, the announcement could not hide the bitterness of the company's refinancing.
, according to the announcement, on April 4 this year, Shangrong Medical issued a plan for the 2018 public offering of convertible corporate bonds, saying that the company intends to issue convertible bonds, raising a total of not more than 900 million yuan. Three months later, on July 10, the Company adjusted its plan for the issuance of convertible bonds to reduce the amount of funds raised from the issuance of convertible bonds to no more than $750 million. At the same time, the original plan will raise funds for high-end medical supplies industrialization projects and increase the overall construction of hospital business funds, adjusted only for high-end medical supplies industrialization projects.
Changjiang Business Daily reporter learned that Shangrong Medical called the high-end medical supplies industrialization project mainly refers to the hospital surgery department, ICU product industrialization project. Although the company has been planning refinancings since 2015, it plans to put the funds into the project. Unfortunately, four years on, the project's investment is far from planned.
's planned fund-raising program has been unable to implement its fund-raising is closely related.
2015, the company plans to raise 1.39 billion yuan, and in the end, most of the investors involved in the subscription abandoned the subscription and actually raised only 200 million yuan. This 200 million yuan of funds, Shangrong Medical all invested in increasing the overall construction of the hospital business funds projects.
2017, the company again planned to raise funds, this time to raise 840 million yuan, the final fund raised only 368 million yuan.
summary, in 2015, 2017 and 2018, the Company's three refinancing plans to raise 3.13 billion yuan, the actual capital raising of 1.318 billion yuan (assuming 750 million yuan of convertible bonds issued smoothly), a reduction of 1.812 billion yuan, close to 60% of the planned fund-raising amount.
For a series of refinancing did not meet expectations, Shangrong Medical explained that the 2015 fixed increase did not meet expectations, due to the year's A-share market fell sharply, some of the subscribers can not raise sufficient subscription funds, and the stock price and the issue price there is an inverted phenomenon, resulting in the company's controlling shareholder, the real controller Liang Guiqiu one person subscription. Financing in 2017 has not been smooth, mainly due to policy implications, investors participating in the non-public offering of shares after the lifting of the ban, but also to comply with the relevant reduction regulations, resulting in investors' willingness to subscribe to non-public issue of shares is not strong enough. of the U.S. merger and acquisition target promised a series of good
in addition to refinancing is not as unexpected, Shangrong Medical extended merger expansion also did not meet expectations.
Shangrong Medical was listed on the small and medium board in February 2011. In its third year of listing, the company plans to expand through intensive acquisitions.
July 2013, the company plans to acquire a 55% stake in Pulder Healthcare, which was completed in January 2015 at a transaction price of 0.98 billion yuan. In January 2014, the company spent 0.20 billion yuan to revitalize its 97.60% stake in nonwovens. In September of that year, the company spent more than $100 million to acquire a 66.21% stake in Jinzhou Medical. In September 2015, the Company acquired a 52% stake in Kangyuan, Taiwan, for 0.25 billion yuan.
is also worth noting that the Jinzhou Medical Equipment Project, which the company has spent more than 100 million yuan to acquire, has not only not brought considerable economic benefits, but has also dragged down the company's development.
of 2014, Jinzhou Medical Made a profit of 6.514 million yuan, compared with a net asset of 38.1897 million yuan at the end of the period, according to public information released by the Ministry of Health. At the end of 2013, its net assets were 30.9659 million yuan.
In 2014, when Shangrong Medical acquired Jinzhou Medical, with the end of 2013 as the benchmark date, the estimated value of Jinzhou Medical's total shareholders' equity was 153 million yuan, and the corresponding transaction price of 66.21% of the shares agreed upon by the two sides was 101 million yuan. On this basis, its acquisition premium is more than three times.
's core asset is Gimrie Healthcare, which owns 90 per cent of the latter. In this transaction, the other party promised that The non-profit net profit realized by Jimei Medical in 2014 will not be less than 13 million yuan, and the net profit realized from 2015 to 2017 will not be less than 15.6 million yuan, 18.72 million yuan and 22.464 million yuan, respectively.
, however, after the acquisition, the company's medical performance has been strong. On December 16, 2016, Shangrong Medical announced that due to external factors such as the national medical reform policy, there is great uncertainty as to whether Jimei Medical will be able to fulfill its original performance commitments in the 2016 fiscal year, and after consultation between the two parties, the original performance commitment period will be extended by one year as a whole, and the relevant performance commitments and compensation arrangements, excess performance incentive clauses and equity transfer payment terms in the Equity Acquisition Agreement will be revised.
revised performance commitments, The net profit after non-recurring gains and losses achieved by Gimrie Healthcare from 2016 to 2018 was not less than $15.6 million, $18.72 million and $23 million, respectively.
until 2017, The Company's target performance remains unreformed. In the same year, its actual net profit of 861.66 million yuan, the actual completion rate is only 46.03 percent. 's weak earnings fell by more than 80 per cent
before 2014, before Shangrong Healthcare's merger expansion and refinancing, the company's operating performance was at a low level, but at a faster pace. From 2011 to 2013, the Company's operating income was RMB348 million, RMB421 million and RMB731 million, respectively, an increase of 29.03%, 20.92% and 73% YoY. .48%, with net profit of RMB 444 million, RMB 0.58 billion and RMB 0.74 billion in the same period, an increase of -4.82%, 32.10% and 26.44% YoY.
with the company's large expansion, the company's operating income increased sharply, from 2014 to 2017, respectively, 1,167 million yuan, 1,666 million yuan, 1,946 million yuan, 2,006 million yuan, nearly doubled in three years. During the same period, net profit was RMB102 million, RMB136 million, RMB114 million and RMB175 million, an increase of about 70% in three years, which was lower than the growth rate of operating income.
net profit growth rate is lower than operating income, the company's accounts receivable are high. From 2014 to the first half of this year, shangrong medical accounts receivable had book value of 615 million yuan, 933 million yuan, 1.234 billion yuan, 1.051 billion yuan and 1.083 billion yuan, respectively, accounting for 36.9 percent of current assets during the same period. 4%, 45.29%, 52.56%, 43.43% and 48.96%, accounting for 52.7%, 56%, 63.87%, 52.39% and 101.03% of operating income during the same period.
accounts receivable are high, and the turnover rate of corporate accounts receivable is decreasing year by year. Between 2015 and 2017, its accounts receivable turnover was 2.15, 1.80 and 1.76, respectively. Thus, once a larger scale of bad debts, will directly impact the company's net profit.
development is not smooth, directly transmitted to the secondary market is the sharp decline in share prices.
June 15, 2015, Shangrong Medical's share price peaked at 62 yuan, yesterday's closing price of only 5.40 yuan, taking into account the transfer factor, after the resumption of the share price, the share price has fallen by 83.71 percent since June 2015. (Changjiang Business Daily)